ACCI launches 2024 Smal Business Conditions Survey

ACCI launches 2024 Smal Business Conditions Survey

by | Jul 22, 2024 | Transcripts

Event: ACCI chief executive officer Andrew McKellar launches 2024 Small Business Conditions survey at Parliament House, Canberra

Date: Sunday 21 July 2024

Topics:  2024 Small Business Conditions survey, CrowdStrike and CFMEU;

E&OE

Andrew McKellar:

We are launching our Small Business Conditions survey today. It’s a very powerful survey and I think it has some very important findings in relation to the conditions that small business are struggling with in the Australian economy at the moment. So in particular, what the survey shows is that the impact of red tape regulation compliance has been growing significantly for small businesses in the past 12 months. In fact, in that period of time, 45% of small businesses said that they had considered closing their business as a result of the difficult trading conditions that they’re facing, and as a result of the red tape burden that they have to struggle with in regional and remote areas, that was even higher. 57% of businesses in regional and remote areas said they had considered closing their doors. Now, if that was to occur, that’s something that would impact over 1 million small businesses in Australia employing around 2 million people. So that’s a very significant far-reaching finding. 82% of small businesses said that they were encountering a major or moderate impact from compliance obligations in the past 12 months. 61% of small businesses said that that burden had increased in the past 12 months. So I think these are alarming findings. They show that in many cases, small business faces really a dire set of circumstances. They’re struggling to cope with it, and we need to get a better balance for small business in Australia. I’ll take any questions.

Journalist:

What does that balance look like?

Andrew McKellar:

Well, we’ve got to get to a situation where small business is able to get through that administrative burden much more effectively. What we’ve seen in the past 12 months, in particular in areas like industrial relations law, this has been changed to make it much harder for small business to create jobs and to employ people to take on new casual employees to deal with independent contractors, new definitions of employment, things like ‘Right to Disconnect’ law, all of these things small businesses grappling with, they find it confusing. Many of them don’t understand why those new regulations are there and why we have different definitions of small business in even a single act like the Fair Work Act, there are two different definitions of small business. So we’ve got to overcome those sorts of hurdles. We’ve got to make it easier for people to run their own small business in this country.

Journalist:

We know obviously there are increasing costs businesses are facing at the moment. Would Friday’s outage have been the final nail in the coffin for any?

Andrew McKellar:

Look, obviously it’s something that’s had a major impact. There’s been inconvenience there for customers, for small businesses, for business more generally. So payment systems have been affected. That’s obviously a very undesirable situation. What I would say in relation to Friday’s outage is that that impact, it was very regrettable in the circumstances. It’s unfortunately unavoidable, at least it is not the result of a security hack or a compromised security system. It’s part of the unfortunate reality of working in a very connected economy. The other thing I just say in relation to Friday is I do compliment the way that the government, the way that officials have responded to this. So the government stood up the national coordination mechanism very quickly. They have had three meetings since then, and I think that’s meant that across the economy, most areas of business have been able to get information about what’s been behind that. CrowdStrike have been involved in that process and advising all sectors about the action that they’ve been taken to remediate that. So I think that’s been prompt and I don’t think we could have asked for much more in the circumstances.

Journalist:

Do you have members given any indication of the dollar amount in terms of the CrowdStrike incident?

Andrew McKellar:

Look, very hard to say. I mean obviously there were a wide range of businesses that were affected as supermarkets, our airlines, petrol stations, retail outlets, financial service providers, the banking sector, payments system. So across the board there’s been a wide impact. There’s no doubt that’s cost a lot of businesses, time, money, lost sales. It’s been inconvenient for consumers. It’s been inconvenient for travelers. So look, it’s very hard to put a dollar figure on that. Those losses will be there.  In the circumstances I think there’s been a concerted effort to get systems back up and running as quickly as possible. So I think from that point of view, business is at least grateful for that effort

Journalist:

If you can’t put a dollar figure on it. How would you characterise the losses are they not significant?

Andrew McKellar:

Oh look, I think that they are material, they’re significant. We have to hope that most businesses can weather that sort of impact over a one, two, three day period. Its timing couldn’t have been worse on a Friday and in particular, impacting on a Friday afternoon. It’s meant for many businesses, they have to wait until early next week to put in place the fixes that they need to do. But obviously that’s very inconvenient.

Journalist:

Does this reinforce concerns that businesses, if they need to IT system up and running, there’s only really a few key players that they can pick from and where they choose to go and get all their systems set up, and if that crashes, there’s so many flow on effects there. Is this a concern that you regularly hear from people or is this kind of reinforce that there are issues on that one?

Andrew McKellar:

Well, it does highlight that there are inbuilt vulnerabilities in the system, and I think when these major service providers are putting out an upgrade in their software, a new version, testing that before it’s put out into the market really is something that needs to occur. So there are going to be lessons coming out of this. I think lessons across the board from a commercial point of view for the IT suppliers for industry more generally in terms of how we try and build those safeguards into the system. For many of the users, there’s not a lot they can do. We do have those vulnerabilities and we really are looking for the suppliers for the IT industry to minimise this risk for the future as much as possible.

Journalist:

In terms of conditions. In terms of conditions of the use, the user’s agreement with CrowdStrike means it’s unlikely that many of these businesses are going to be able to seek redress through that. Obviously there is business continuity insurance. What’s your message to insurance companies in terms of trying to make people (indecipherable) quickly as possible?

Andrew McKellar:

Well, I think it’s an important reminder for business that insurance is a very important part of managing risk in your business. So I think here the insurance sector does play a vital service in that regard, and I think here reminding people that insurance, if you incur a cost, having that protection there can be an important part of overcoming the impact of the cost. Particularly if you are looking at those sort of business continuity issues, having a plan in place when those unexpected circumstances impact, you can’t control ’em. We don’t know where they’re coming from. It’s a world where there are increased levels of interconnectedness and there are layered levels of risk as well. So I think that’s why keeping an awareness of all the options that we have, including insurance, is very important for business and for small business.

Journalist:

The problem though is that if you’ve got a situation where an insurance company says, oh yeah, we’ll figure it out and it’s three or four months down the track, that’s a cashflow issue for many companies. Do you want to see insurance companies getting onto this quick and paying out as quick as possible?

Andrew McKellar:

Oh look, obviously we hope that the insurance companies will honour their contractual obligations in a smooth and timely way. And look, we have a very good dialogue with the insurance council. I think insurance companies are very mindful of those things, so that’s something we’ll work through with them in a very smooth and effective way.

Journalist:

Just following on from Ron’s question, do you think businesses should be entitled to compensation for this outage?

Andrew McKellar:

That’s difficult to say. I mean, I think it goes back to the issue of what contractual arrangements are in place with different suppliers. This is not a circumstance that’s been brought about by somebody hacking the system or a breach of security. It’s obviously something that’s quite unintentional. There are lessons that come out of it. I think for many businesses it’s going to be very difficult to secure direct compensation, but obviously that’s something that should be looked at and I think if there are ways to consider how that might be evaluated, then obviously that’s something that should be on the table.

Journalist:

Sorry, just on that then, in between now and until we know whether or not compensation’s an option, what should businesses, particularly small businesses who have lost money, should they go back over and check what they have covered in their insurance? Is that worth, what should they do? What’s your advice?

Andrew McKellar:

Well look, I think here, yeah, absolutely. I mean, and it is a reminder, regrettably, for a lot of businesses, this is going to be water under the bridge. It’s going to be a learning experience. I do think every effort has been undertaken to ensure that business is well-informed about the circumstances and obviously to work to get in place the patches and to upgrade systems, restore systems as quickly as possible.

Journalist:

We saw a Senate inquiry after the Optus outage. Do you think a similar investigation in Parliament would be worthwhile into this incident?

Andrew McKellar:

Look, I’m not sure whether that is the appropriate course of action. I think here working with the central agencies, working with home affairs, working through the national coordination mechanism, working through the cyber council that the government has set up. It’s not just security issues that pose a risk in the modern economy. It is these other unintended outages as well that are also at risk. So I think taking the opportunity to really learn the lessons, that’s going to be absolutely fundamental for business. And are there any questions on the survey? Happy to answer those as well. One more

Journalist:

Quickly on CFMEU. I’m very sorry. Are you at all concerned about the response from some state branches to CFMEU? It looks like they’re going to fight tooth and nail against any administrators being put in place. What’s your response to that?

Andrew McKellar:

Very good question, Ron. No, look, this is an absolutely serious issue. It is worrying to see that elements of the CFMEU of the construction division may contest the application for an administrator to be appointed. From our point of view, that is just one step appointing an administrator. We need to see the full details of that. I think the public has to have confidence in the solutions that are being sought to be implemented here. It’s not clear that simply the appointment of an administrator will go far enough. Those divisions of the union that wish to demerge, that wish to get away from the taint of the construction division, they need to be able to do that. Deregistration needs to still be on the table at the appropriate point in time. We have to have a regulator that has the independence and the resources to really get to the bottom of what’s been happening in the construction industry to clean that out, to enforce the standards in the future.

So there’s a number of steps here. I think business is really concerned still that we don’t have all of the solutions. There needs to be a strong commitment from the federal government, from state governments, territory governments to root out the corruption that’s been going on in this sector to take firm action and ensure that there is strong enforcement of standards in the future. We’re not in that situation at the moment and we don’t have confidence that we are going to get there in the short term without additional measures to those that are already on the table.

Journalist:

Just want to ask about the sample size of the survey. It was about 400 businesses. Is that really representative and can you be definitive to say that all of these businesses that are considering closure, it’s all because of red tape we’ve had pretty challenging times….

Andrew McKellar:

Sure. Yeah. Look, that’s the number of respondents that we’ve had. We think that’s a good number. Obviously we’d like to get more. This is the first time we’ve run this particular survey. We’ve gone out to a broad network. We’ve used our statement and territory, chamber network. I think it’s a measure of the fact that for many small businesses, they simply just don’t have the time. So we’re asking them to give more of their time to respond to things like this. And many of them are happy to do that because I think the findings of the research are very important. So we’re comfortable. This is a very good and representative sample of respondents that we’ve got. Yes.

Journalist:

The Reserve Bank and the Treasurer are talking about a narrow path, the economy bringing inflation down, the jobs market’s holding fairly stable unemployment coming down slowly, but are they forgetting small business in their narrow path? We’re seeing demand and people’s disposable income shrink and vanish completely.

Andrew McKellar:

Yeah. We’re walking a tightrope, conditions for small business remain precarious. They’ve struggled with higher input costs. They’ve struggled with getting the labour and the skills that they need. The labour market has been surprisingly strong. That’s a great thing. But interest rates have done their work. They’ve had an impact on the economy. The next step we need to get to is to start to see interest rates coming down. The best way to take the pressure off the cost of living and the cost of doing business is to start to reduce interest rates. So that’s why we need to see inflation coming down, getting back into that target range for the Reserve Bank and seeing the Reserve Bank get to the position where it has the confidence to start reducing interest rates. So the sooner that can happen, the better it will be for the Australian economy.

Journalist:

Just on CrowdStrike from seeing of the major companies, Woolies et cetera. Their issues are now their overall generally fixed. What about the small business? Does it linger for small business? Will it be not just Monday or Tuesday they’ll be back to normal?

Andrew McKellar:

Look, we hope so I mean the solutions are out there. They’re accessible. They are being provided by CrowdStrike. So of course for small businesses, depending on how many devices you have, what systems you’re running. I think the biggest impact for most small businesses was things like the loss of their payments systems, their connections to their banking, finance, and finance operations. So hopefully that’s where it will stop for most of those businesses. Of course, there’ll be some that will take another couple of days to implement the patches themselves.

Journalist:

And just also with the compensation element. You said it’s difficult because there’s not been a hack. Is that the sole reason or are there other factors it’s going to be difficult to issue compensation?

Andrew McKellar:

Well, I think it comes back to how do you shoot back the fault for something like this? Obviously this is something that is coming from one particular supplier. What are the contractual arrangements you have in place with the suppliers? Obviously if there is damage, it’s something that some businesses should look at, but that can be a difficult path. Now, whether or not there is grounds there for some sort of class action or not, that remains to be seen. I think we’ll leave that in the hands of the lawyers and the creative minds in that area. I think at this stage, most businesses, most small businesses are simply focused on what they need to do to make sure that their systems are working, that they’re able to service their customers, that they’re able to accept payments and they’re able to get back up and running. That’s the priority. Okay. Thank you all. Thanks very much for coming out on a Sunday morning.

For more information:
Craig Sullivan| Media Advisor
P | 02 6270 8020
E | media@acci.com.au

ACCI responds to government action on CFMEU

ACCI responds to government action on CFMEU

by | Jul 17, 2024 | Transcripts

Event: ACCI chief executive officer Andrew McKellar press conference at Parliament House, Canberra

Date: Wednesday 17 July 2024

Topics: CFMEU; US political and economic situation

E&OE

Andrew McKellar:

Alright, we’ll get started. So I just wanted to make a statement, a further statement today in relation to the CFMEU matters. I think the first thing to observe is that this situation is spiraling. It’s continuing to develop on a day by day basis. We’re seeing more evidence coming out and it’s likely that there will be further evidence coming to light in the coming days. So I think it is a very serious matter and something that warrants a very close attention and effective response from government at all levels. We heard what the minister had to say, we listened carefully to that and there are some important points that we agree with in terms of his assessment of the situation. We certainly agree that the general manager of the Fair Work Commission should be given the opportunity to take action here and to appoint independent administrators or an administrator.

So that’s something that certainly is an appropriate power that is there with the commission at the moment. We also recognise that the government has said that it will legislate if the Fair Work Commission encounters any barriers to that action. So that’s also appropriate and it’s appropriate that the government is coordinating with the AFP Commissioner and encouraging the AFP to coordinate closely with their state law enforcement counterparts. All of those things are good steps we would say they need to go further. There needs to be stronger action. Certainly deregistration of the CFMEU or the relevant constituent divisions needs to be on the table. That’s a sanction that needs to be there and if necessary, it should be applied. And beyond that, I would say that the most important thing here is that public confidence is restored. We need to see strong decisive action. We think that that needs to go further with a full transparent public inquiry with the powers of a Royal Commission.

Journalist:

Do you accept the minister’s explanation that deregistration lost its teeth because of the Work Choices changes and in fact would have no material effect on the CFMEU? So the course of action the government is taking according to Minister Burke is in fact tougher for deregistration.

Andrew McKellar:

Well, we certainly accept that the appointment of an administrator or administrators by the general manager of the Fair Work Commission, that is a tough sanction, but so is deregistration and the relevance of deregistration is not gone. It should be on the table. It certainly would make it more difficult for the CFMEU or certainly those contaminated parts of the CFMEU to discharge their function as they have been doing, pursuing strategies of coercion and intimidation in the system.

Journalist:

The minister says that the hierarchy of the party will meet tomorrow to consider the question of taking donations from the union going forward. Do you think there are any circumstances in which it is acceptable for federal Labor to continue to take money from the CFMEU while this kind of a cloud hangs over its behavior?

Andrew McKellar:

Well, I think those are questions for the organisational part of the Labor Party, but clearly public confidence is an issue here. And I think any major political party in Australia should question where those donations are coming from, whether there are links or potential links to organised crime, criminal activities and I think that’s a risk that they’ve got to assess for themselves.

Journalist:

The Fair Work Ombudsman is looking into some of the allegations, particularly in Victoria and EBAs entered into unwillingly or strong arming to get people into EBAs. But a lot of businesses I’ve spoken to have said that they are hugely fearful of putting their heads above the parapet because they saw during the Royal Commission, even though that the bad findings were made several years after the fact, they were finding themselves being retaliated against by the CFMEU. What does the government need to be doing to one, allow people to make complaints in a way that shields them and two, how to protect them from retaliation potentially months and years after the fact?

Andrew McKellar:

These are significant issues. There is a real risk of intimidation, coercion, retaliation for anybody in these circumstances. And I think there has to be the highest level of protection afforded under the law to honest, hardworking businesses that are just trying to contribute to the economy and don’t want to be confronted with these issues. So there need to be protections in place if we need to see further changes in the legislation, if we need to look at reversing the decision to dilute the powers that the ABCC had, putting it in under the Fair Work Ombudsman, you need a strong independent organisation regulator able to go out there and enforce these conditions and standards on the union and to have the power and the resources to back that up as well. That’s what the government needs to do. It was a terrible mistake to abolish the ABCC and they need to come up with a much better alternative than what they’ve got at the moment.

Journalist:

Does it concern you that the number of prosecutions against the CF… number of actions taken against the CFMEU have basically since the end of the ABCC have diminished to zero?

Andrew McKellar:

Absolutely. I mean, clearly there is a lot of evidence out there. We’re seeing media organisations digging up that evidence. At the moment. We’re not seeing it coming from the regulators. We’re not seeing it coming from the law enforcement authorities. We’re not seeing it coming from the commissions in each of the states. We’re seeing it coming through the media. So I think that is a very worrying sign that this evidence has been uncovered in the media, but we’re not seeing it generated through those channels where it should be possible to gather that evidence and take action.

Journalist:

On another topic. The International Monetary Fund now says interest rates will likely have to stay higher for longer because of the stubborn nature of inflation around the world. What does the business group draw from the IMF’s conclusions and how relevant do you think that they are to the Australian setting?

Andrew McKellar:

Well, I think they’re very relevant and this has been at the heart of the debate, the discussion over the state of the economy. We’re seeing that inflation in Australia has been sticky. We’re seeing that input costs for businesses have continued to rise. Wages have increasingly been part of that equation that’s keeping inflation above the target range that the RBA has. And for as long as that remains, it will be very difficult for the RBA to take the decision to start reducing interest rates. So that has to happen. We have to have a situation where inflation is getting back down into that target band for the RBA.

Journalist:

The Treasurer even hinted in a comment this morning that perhaps ongoing inflation might start to feed into job numbers that are out tomorrow and that they might not be as good as the government had hoped as a result. Is it fair for Federal Labor to put any adverse signs in job numbers down to those pressures?

Andrew McKellar:

Well, the labor market has been incredibly resilient. I think it’s fair to say that probably many commentators have been expecting the unemployment rate to be higher than where it is now. I think it’s a good thing that the labour market has been as strong as it has been and we hope that that can continue. But obviously in an environment where business is walking a tight rope, it’s going to be hard to sustain the strength in the labour market for a longer period.

Journalist:

And Andrew, I may one more, see if we can on the CFMEU, we’ve heard matters in Victoria, New South Wales, we’ve now got things arising in Queensland. Victorian branch issue will affect South Australia and Tasmania. The ACT is sitting like a little island in here. The Chief Minister in the ACT has said nothing to see here. What are you hearing from your branch here? And its members, certainly the Master Builders in the ACT have said no, the problem spreads to the ACT as well. What are you hearing?

Andrew McKellar:

Look, I think what we’re seeing is that this is a multi-headed hydra. There are problems in every state and territory, most likely. I don’t think it can be swept under the carpet in any jurisdiction. It has to be taken seriously. And that’s one of the reasons why we are looking for the federal government to take a lead on this and ensure that the states are moving quickly, that there is the corporation with the state commissions, the corruption commissions, and also the law enforcement authorities. But they need to go beyond their public confidence is paramount in this. And at the moment, the public has no reason to be confident that we are getting to the bottom of this anytime soon. Thank you. Thanks very much.

ACCI responds to media reports into CFMEU

by | Jul 15, 2024 | Transcripts

Event: ACCI chief executive officer Andrew McKellar press conference at Parliament House, Canberra

Date: Monday 15 July 2024

Topics: CFMEU; US political situation

E&OE

Andrew McKellar:

Clearly there are very, very serious allegations that have been raised. Investigations by the media agencies raise fundamental questions. I think it’s well established that the CFMEU over a long period of time has consistently shown an inclination to operate outside of the rules of the industrial relations system. And there are a number of court cases, legal actions, which have demonstrated that the allegations of criminal connections and impropriety. These are very serious. They raise the concerns to a new level, and we are calling on the federal government to take decisive action here. We think that at a minimum, an independent high level judicial inquiry is warranted with all of the powers of a Royal Commission.

We can’t stand idly by and see such significant concerns being swept under the carpet. There are major issues for state governments. There are major issues in the building and construction industry, which can’t be ignored. I think what the recent allegations show is that the abolition of the ABCC was a terrible mistake. That longstanding behavior of the CFMEU ignoring the rules, the operation of law and practice in the industrial relations system, demonstrates that they can only be held to account if there’s a powerful, well-resourced independent regulator that can bring them to book and hold them into account as often as possible. Beyond that, the criminal allegations are very serious, and they need proper investigation.

Journalist:

You raised the possibility of these allegations being swept under the carpet. They’re your words. Did you have a real fear that they might be swept under the carpet and what would that look like?

Andrew McKellar:

We’ve seen a very muted response, I think, over the past day or so as these allegations that result of the investigation that have been conducted by media agencies has come to light. We’ve seen a very muted response from state governments, from Victoria and Queensland in particular. So, I think that points to the fact that we haven’t yet seen any evidence that those governments are taking these accusations, these allegations seriously. They need to do so in those circumstances. It’s really up to the federal government to ensure that there’s public confidence and that these allegations of criminality are properly tested.

Journalist:

It sounds like you don’t have confidence in any of those governments to do what needs to be done, fair comment or not?

Andrew McKellar:

I think so far, the reaction of some governments at the state level in particular has been puzzling. It’s been very muted. We’ve seen more evidence from the federal government expressing concern, but simply deregistering the union, simply having the national office of the CFMEU come in and take over the administration of the state division in Victoria, that’s not adequate. It needs to, public confidence needs to be restored. The only way you can do that is to have a high-level judicial inquiry with all of the powers of a Royal commission.

Journalist:

How concerning is that muted response from the states?

Andrew McKellar:

It’s very puzzling. These are serious allegations. They need a strong response. So, we do expect that governments should come back with a coordinated response that demonstrates that they are protecting the public interest. I mean, let’s not lose sight of the fact that some of these allegations go to the fact that there are taxpayer funds involved, public construction contracts that are involved. So clearly those issues need to be investigated. That’s why we say the federal government needs to step in, needs to take control of this issue, needs to set up a process to really address the stench that is emerging on these serious allegations.

Journalist:

On another front, if I might, Australian business has a critical interest in the health of the American economy and democracy, frankly. What concerns do you have representing Australian business, seeing the events of yesterday and what might unfold over the next few months?

Andrew McKellar:

Obviously, there are huge concerns. There’s a lot at stake in the forthcoming election in the United States. That’s absolutely true. I mean, the United States is the number one source of inward investment in Australia. They’re a major trading and economic partner, a major strategic partner. So, our futures are very much bound up with a strong United States, which adheres to the democratic values. So yesterday, of course, was a great concern. What was seen, I think the response of the Australian government was entirely appropriate on both sides of politics, and I think our political leaders spoke very well for the Australian community, including the business community.

Journalist:

What are the dangers for business in the months ahead for Australian business looking in the United States?

Andrew McKellar:

There’s obviously a lot bound up in the future of the US economy. It’s a major driver of the global economic cycle. So, ensuring that there is confidence, a strong approach to economic policy there, that’s going to be vital in terms of who forms the next administration.

Journalist:

One more question on that, if I might. I mean to most onlookers, Trump and Biden are very different candidates with a very different, certainly foreign policies and approach to trade. They’re two critical differences. What’s the view of Australian business on which administration better suit business interest in this country because they’re very different?

Andrew McKellar:

The business community understands that the US process is one of the most democratic in the world. So it’s up to the American people to determine the government, the administration that they elect, and obviously the business community will look to work effectively with whoever forms the next administration in the us. That’s a matter entirely for the democratic process of the American people.

Journalist:

Just back on the national executive taking power from the Victorian branch, do you hold any hope that that will lead to many changes?

Andrew McKellar:

Not at all. I mean, I think that’s a smokescreen, to be honest. It gives us no confidence. So, whether or not the CFMEU is being operated by the national branch, whether or not there’s a move to deregister, the CFMEU, I don’t think either of those moves have given us any level of confidence that that will address the fundamental issues we’ve seen in the past over decades. In fact, the CFMEU and its predecessors, in fact, if you go back to the time the old BLF, which was deregistered, it didn’t change the culture. The only way to address that is to have a strong effective regulator like the ABCC, which is well-resourced, which can hold these people, these organizations to account when they step outside the law. Beyond that, the issues of criminality are also much more serious, and they need a strong response as well. It doesn’t provide a long-term solution. It may well be necessary in this case, but it doesn’t give us confidence that there’s a long-term solution in the building and construction sector.

ACCI responds to Annual Wage Review decision

by | Jun 3, 2024 | Transcripts

Sky News NewsDay, Monday 3 June 2024

Topics: Annual Wage Review

E&OE

Kieran Gilbert: What’s your assessment of the wage decision today, is it reasonable?

Andrew McKellar: Look, 3.75 per cent, I think this tests the limit of what business would see as being a reasonable outcome. The good thing is it’s nowhere near the extreme position that the ACTU were arguing for, and I think that would’ve been a very bad outcome if we’d gone significantly above inflation, five per cent and more in some sectors. I think from an inflation point of view, broadly, this is neutral. It’s not really reducing the pressure on inflation for business. The real concern is particularly small business at the moment, they’re facing extreme cost pressures from increased regulation, red tape, wage pressures are still there, and if we don’t see productivity really picking up in the next few quarters, then I think that’s going to be a concern.

Kieran Gilbert: What’s the biggest worry right now for small business? Is it the interest rate pressures or falling demand from consumers? What’s the thing that you’re getting from your membership?

Andrew McKellar: There’s a range of things, and there’s no doubt that the confidence took a hit in the first quarter. Orders were weaker, so demand has come off. Interest rates have done their job. But the other thing that we’re picking up, and this is coming through very clearly from small businesses, they’re very concerned about the impact of red tape compliance that’s grown over the past year. It’s growing more, particularly with things like the industrial relations changes coming through in the coming months and coming quarters. Small businesses really struggling just to keep its head above water in terms of the amount of compliance that it’s having to do at the moment.

Kieran Gilbert: But this decision today by the Fair Work Commission, as you said, it tests the limit, but it won’t be putting business over the edge. Will it sort of increase?

Andrew McKellar: I think the one concern we’d have here is, is there a continuing delinking between wages, growth and productivity? We think that this is fine from the point of view of just looking at a neutral position in relation to inflation, but if we want to get real wages moving, we want to see that achieved sustainably. We’ve got to get productivity going.

Kieran Gilbert: I had Tony Burke on the program earlier, the workplace minister, and I asked him, I put some of the criticism from you and others that their IR changes are hurting the prospects for productivity. He rejects that notion. He says there are many other ways to drive productivity right now, and it shouldn’t have to be the lowest paid that have to suffer in order to drive productivity. What do you say to that?

Andrew McKellar: Unfortunately, the government’s industrial relations changes have been crushing and productivity. That’s the reality. And going forward, it will make it much harder for business, for small business to make the decision to employ people going forward. Whether that’s in casual employment, whether that’s independent contractors, whatever it is, that’s a significant additional compliance burden that business is struggling with at the moment. That’s on top of all the other factors. So I’d have to disagree with what Tony Burke said.

Kieran Gilbert: Why is it harder to put on workers moving forward for a small business? If you wanted to put on one or two workers, what are the changes that…?

Andrew McKellar: In terms of the definition of what is a casual employee, the fact that there is much greater uncertainty as to how that will be applied in the future. Of course, business has to adjust now to comply with a number of those changes that have been put through. That is adding to that amount of time that business has to take and the risk when they take somebody on that potentially if they get into a situation of dispute, that they’re going to be tied up with further cost of litigation as a result.

ACCI responds to Budget on Sunrise

ACCI responds to Budget on Sunrise

by | May 15, 2024 | News, Transcripts

Event: ACCI chief executive Andrew McKellar and AMA president Professor Steve Robson interview with Natalie Barr and Matt Shirvington on Sunrise.

Topics: Budget 2024-25

 

E&OE

Natalie Barr: Australia’s health sector received a major boost in last night’s budget with new funding on the way for 29 urgent care clinics and extra financial support for student healthcare workers.

Matt Shirvington: On the business front, the government has also committed more than $560 million to support Australian innovation and industry. And one million small businesses will receive $325 in energy bill relief. To unpack, let’s bring in Andrew McKellar from the Australian Chamber of Commerce and Industry and President of the Australian Medical Association, Professor Steve Robson. Good morning to you. First to you Andrew. The Treasurer is confident his Budget won’t further fuel inflation and predicts inflation will fall to between two and three per cent by December, which is look a little bit earlier than the RBAs forecast. Right. So are you concerned that they’re going to get it right?

Andrew McKellar: Good morning, Shirvo. Good morning, Nat. Great to be with you. Look, I think we’re cautious about those forecasts. I think it’s great that the government has got a second budget surplus, so that shows that they’ve been responsible in the last 12 months. But if we look ahead over the next couple of years, then we see deficits reemerging. We see spending going up. And in that sort of context, it’s very difficult for that to take heat out of the economy, to keep inflation going lower. We’ll see what the Reserve Bank thinks, but it would be hard to imagine that this Budget would bring forward the date on which the Reserve Bank would start lowering interest rates.

Natalie Barr: Lots of opinions around this morning. People want to know how it’s going to help them. What about small businesses? Is there enough support for them?

Andrew McKellar: Small business is doing it extremely tough at the moment. They’ve been facing rising costs just as households have. There’s slim pickings in the budget for small business. So there are a couple of things that are welcome. Certainly the extension of energy bill relief, which will reach a number of small businesses projected about a million. That’s useful. There’s an extension of the instant asset write-off. Again, that’s just been legislated from last year. So I think if the government gets on and processes that quickly, then those are boosts for small business. But beyond that, we’re not seeing a whole lot.

Matt Shirvington: There needs to be more on that. Steve, let’s go to you. Healthcare, significant new funding on the way for aged care, public hospital, student healthcare workers. Some of that delayed though. Is that what you are hoping for?

Steve Robson: I think we had a sense of disappointment with the Budget last night, and a lot of patients, people want to know that they can get an appointment to see a GP, that they can afford that care, that all of the hundreds of thousands of Australians who are waiting for planned surgery around the country can have their operations done. And people with chronic problems like mental health will get support. And I don’t think we’ve seen a lot of funding going to any of those in the budget last night. These urgent care clinics, they’ll be a help. They look urgent care clinics are somewhat controversial. There’s not a lot of, they serve their purpose, which is keeping Australians out of emergency departments. We feel that the best way to keep Australians out of emergency departments is to make sure they can see a GP and get great care. So we’re a little disappointed with the announcements last night, but we’re hoping to keep working with the government as we move forward so that Australians can get the care they need, the operations they need as soon as they need them.

Matt Shirvington: Okay. Andrew, Steve, thanks for cutting through some of the detail for us.

ACCI responds to Budget on Sky News

ACCI responds to Budget on Sky News

by | May 15, 2024 | News, Transcripts

Event: ACCI chief executive Andrew McKellar interview with Peter Stefanovic on Sky News First Edition

Topics: Budget 2024-25

 

E&OE

Peter Stefanovic: So we’ve had a bit time to crunch through the numbers now. In your view, is it going to help or hurt business?

Andrew McKellar: Well, morning, Pete. Look, I think there’s not a huge amount in it directly for business. I think what business fundamentally was looking for was a clear sign that there’s a medium term strategy to get the budget back into better shape. That we would be reducing net debt over the medium term. Now we’re not seeing that beyond this year, a surplus this financial year. That’s a good achievement, but out over the medium term, we’re seeing higher spending, higher deficits and higher debt. So we are concerned that that won’t take the pressure off inflation and it won’t take the pressure off interest rates.

Peter Stefanovic: So that’s your view. I mean, so we’ve kind of got short-term gain for long-term pain. Without that medium term strategy, what happens to business then if that’s not brought under control?

Andrew McKellar: Well, I think what business is looking for is to get those fundamentals right at the moment. Small business in particular is absolutely struggling against a tide of regulation red tape, but we need to ease those cost pressures that one of the best ways to deliver cost of living relief and relief in terms of business costs is get to a situation where interest rates can start coming down. Now, if I wasn’t alarmed already, I was alarmed after hearing your interview a short time ago with the ACTU President, Michelle O’Neill, because what she was pointing to was not only the fact that we have those question marks over the budget strategy, but the unions signalling that they’re going after wages. If we have those two things pushing together, it’s going to be even harder again to get interest rates going down. So I think that’s a real warning bell for business and for the Australian economy.

Peter Stefanovic: If she did say this was good for wages, but long term what the businesses don’t make it and they can’t afford to pay them, is that the line that you are taking?

Andrew McKellar: Well, absolutely, and the one word that seems to escape the union movement is productivity. That’s one of the things that we are looking for in the overall strategy. We didn’t see a lot of that last night, and I think really here it’s about how do we free up that opportunity to make Australian business much more competitive? We’ve got to invest in innovation, we’ve got to invest in skills. We’ve got to be making our markets more competitive. If we’re not doing that, then we’re not going to see those benefits.

Peter Stefanovic: Are they not doing that with the longer term plans future made in Australia with its tax breaks, housing plans? Can they be success stories?

Andrew McKellar: I think it’s an interesting strategy and of course we keep an open mind on that. The concern I would have is, whilst it’s been much vaunted, when you look at the detail and there’s a list of different measures there, as long as your arm, it adds up to $22.7 billion over 10 years. In practical terms, I’m not sure that that’s enough to shift the needle. I don’t think it’s a huge risk, but at the same time, I’m not sure that it’s going to be enough to really drive that sort of new investment.

Peter Stefanovic: What about these energy rebates, Andrew? Not just for households, but businesses too?

Andrew McKellar: They are welcome of course. I think there are many businesses and many households who are struggling with those higher costs. Absolutely. Look, we want to see a fundamental energy market reform, and the government last week announced its future gas strategy. That was a step in the right direction because gas is an important part of that energy transition. So I think with bigger picture items like that, business is more confident.

Peter Stefanovic: Is that inflationary? Just to wrap up.

Andrew McKellar: Look, it’s not inflationary. The energy bill relief will obviously detract from the headline CPI. Does it do anything for underlying inflation? I think that’s the real question and I’m not convinced that it does a whole lot in that area.

Peter Stefanovic: Good to see you, Andrew. We’ll talk to you soon.